Page 24: of Marine News Magazine (September 2014)

LEGALCOLUMNmake the trustee look at the matter closely and, if the trust- ee Þ nds that a valid argument does not exist, the trustee may abandon the claim. If the Þ rst two responses are not effective, you can then assert your defenses. If all of this fails, and the bankruptcy trustee continues looking to recover your payment, donÕt give the money back quite yet. It is important to remember that you are not the only creditor from whom the trustee is seeking reimbursement and that you are in a good position to try to negotiate a compromise. As long as you are still holding on to the funds, you can try to negotiate a compromise that is acceptable to the trustee. A settlement will allow you to keep a portion of the funds. If you return the funds, you will not be in a position to negotiate as you are simply put back into the pool of creditors that will be paid based upon your priority in the bankruptcy system. Now that you have an overview as to how a preferential payment will be handled, you are in a better position to make a decision as to how to avoid getting onto such a pre- dicament in the Þ rst place and respond once you receive such a notice from a trustee. Furthermore, knowing how this system is administered, you can structure your future payment terms and collection efforts to try to avoid being caught in bankruptcy limbo. Mr. DeMarcay is a partner in the law Þ rm of Fowler Rodriguez Valdes-Fauli. His areas of practice include Commercial Litigation, Admiralty, Personal Injury, Transportation, Real Estate, Construction and Corporate Law. Prior to attending law school, Mr. DeMarcay served on the Washington based legislative staff of Congressman Jimmy Hayes. On the WEB: www.frvf-law.com September 201424 MNMN Sept14 Layout 18-31.indd 24MN Sept14 Layout 18-31.indd 248/20/2014 11:43:38 AM8/20/2014 11:43:38 AM